Diane Farrell, board member of the Export-Import Bank of the United States, attends the Infrastructure Asia 2010 Conference & Exhibition in Jakarta, Indonesia, on Thursday, April 15, 2010. The Infrastructure Asia 2010 Conference and Exhibition takes place from April 14-17. Photographer: Dimas Ardian/Bloomberg via Getty Images

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Diane Farrell, Acting President, United States-India Business Council, (USIBC), is in New Delhi to attend the CEO Conclave that will be addressed by President Obama and Prime Minister Modi on Monday, 26th January in New Delhi. USIBC, along with Indian business chambers FICCI and CII, will be hosting the conclave.

In this interview with HuffPost India, she discusses India-U.S. business relations in the wake of U.S. President Barack Obama’s visit as the Chief Guest for India’s 66th Republic Day.

After relations soared during the Manmohan Singh and Bush administrations, there was a cooling down after Obama came to office. What led to that?

Part of the cooling down was due to the impact of global economic decline. We were talking about dire economic conditions globally. India skimmed the surface but was still impacted.

A series of troubling policy decisions taken by the UPA government sent negative signals to the investment community. For instance, the decision of retroactive taxes on Vodafone. They rolled back a law that was 30 years old. Such changes to the tax code affected Indian businesses as well.

"A series of troubling policy decisions taken by the UPA government sent negative signals to the investment community"

Then there was the whole issue of transfer pricing. It was felt that in many cases subjective decisions were taken in many cases about the value of sales after the sales had taken place and in some cases after the price had been established. That affected every industry and wasn't specific to one or the other. The land acquisition and resettlement act was yet another. And you are watching the debate now unfold to undo some of the onerous provisions. You want to be fair when it comes to compensation, which is right, and certainly every government wants to make sure that those who are at risk of being underserved are fairly treated. But putting up barriers that makes the private sector not even think about investing has a adverse impact on development. Specially in manufacturing.

So in the term of the last government, there were signals, some deliberate through legislative actions and otherwise an inability to get things done, such as stuck infrastructure projects that caused investors to turn away and look for alternatives.

What has changed after Prime Minister Modi took charge? Because there is a feeling that reforms have been slower than expected.

The intent the prime minister has expressed and evidence of some of the reforms that have taken place have completely changed investors’ views. Of course the jury is out - there are people who have been here a long time and seen the peaks and the valleys but you have more and more believers that a peak is achievable this time. The president comes at a time when the US government recognizes that India is on the upswing. He wants to ensure that there is a strong, solid partnership that has no limits. It is conceivable that trade might go from $100 billion in two way trade to $500 billion on two way trade.

And when we talk to our companies, which we did as an informal survey before the prime minister came to the United States in Sept, twenty percent said they expected upwards of $41 billion in new investments. If the reforms come, the prime minister and India will be able to deliver on some of these aspirations. The president of course coming for Republic Day Monday is a clear indication of what the Obama agenda is - modernizing relationships, as he said in the State of the Union speech, and recognizing the potential through the 21st century.

So are businesses in the U.S. satisfied with the progress so far?

"The president and the prime minister have been able to retain a clear vision inspite of the chaos and the confusion, which is to their credit as leaders"

You know we both come from democratic societies and such societies are inherently messy. and so leadership is being able to view aspirational beliefs about the future. And here both president Obama and prime minister Modi are both effective. They are the reason people vote for them, and citizens stand behind them because they are able to share that common vision and goal. But in democratic societies it invariably takes longer. I'm a former elected official so I relate very directly to trying to translate aspiration into implementation. And I think that again in both cases the president and the prime minister have been able to retain a clear vision inspite of the chaos and the confusion, which is to their credit as leaders. In the prime minister’s case, he is translating a governance model from the state level to the national level, where he is now trying to manage 1.2 billion people with a very complex political structure and a very diverse set of political interests. And so its not surprising that things didn't happen overnight. But there are evidences that are really important to focus on. The decision of the government going the ordinance route is a signal that needed to be sent to the global investment community.

Most reforms have been made through ordinances, that are temporary. What is your view on that?

The decision to pursue an ordinance on FDI and insurance which people understand is a temporary measure - clearly parliament is still going to have to act - sends a signal, and indicator that he has not given up on this commitment in spite of some political hurdles along the way. That’s very important. More tangibly, the prime minister has created an inter-ministerial committee to address bottleneck and troubleshooting issues directly on behalf of companies. In the case of US companies the DIPP secretary Amitabh Kant is now responsible for troubleshooting for stuck projects for companies in India right now and has held two meetings with member companies. Some of these problems are simple like solving local traffic issues to enable trucks to exit manufacturing plants. They are not all the big macroeconomic changes. But the fact that the PM has tasked a high level individual who has a reputation for delivering on promises sends an incredibly strong signal to investors both here and who are looking at India and say ok, if I have a problem I have a place to go to someone who can actually solve the problem.

Honestly, judging any public elected official in - seven months now in office for the prime minister - is typical but I don’t think its necessarily representative of the coming months and years ahead.

Now such judgment starts in first 100 days. Don't you think that, from that view, seven months seems to be a long time?

One of the things this government has said is that they are trying to make changes everyday, they are not saving up everything for one special day. Again I think they are finding their way, navigating through a lot of expectations from any number of different quarters. I think they are doing okay. It’s not easy. Ask president Obama, what it was like six months into his tenure. I’m sure he and the prime minister and sharing those experiences.

Among the things that you would expect Obama and Modi to sign, will there be things that will need Congress’ approval? Because that is now controlled by Republicans, who are not eager to make the way smoother for him.

That’s a great question. We would very much like to see a bilateral investment treaty move forward. That would need ratification in the Senate. The bilateral investment treaty would be an excellent first step towards - and no one sees this happening in the near term - a free trade agreement. The hope is that we can get those talks back on track and that would be another indication of good solid economic cooperation.

In which business areas do you expect to see definite areas of forward movement this time?

I think you will see continued expressions of defence cooperation, and announcement of sales specifically. There is an expectation of an MoU signing on smart cities initiative for the three smart cities - Ajmer, Allahabad and Vizag - with the trade development agency. We are not aware of anything official- these are gleaned from various conversations. And certainly given the focus that US leadership is placing on environmental issues, such as air quality standards, I think there will be an emphasis on renewables. I truly have no further specifics, both governments are holding it very close to the chest.

Some policies of the last government affected the investment mood, as you said. What specific measures would US businesses would like Obama to raise with Modi?

"We have to move beyond an emotional reaction to sector issues such as pharmaceuticals"

We have to move beyond an emotional reaction to sector issues such as pharmaceuticals. There have been talks, but the discussion turns quickly to an emotional place. which isn't really solving the problem and creating a dynamic where people are talking past each other. The reality is that intellectual property extends to every company. We are talking about sophisticated technologies that enable industry to function and continue to innovate. So whether you are talking about sensitive technology transfer in defence for example or you are talking about copyright or privacy or other forms of intellectual property that companies need to protect, its a broader subject area than the discussions have covered. Good that the government of India recognizes this, and Indian innovators have their own reasons to make sure India has a strong IPR policy. The government now has a working group that is in pace right now to create a national IPR policy. Even in the US-India trade policy forum, there is now a separate group that is just taking on the issues of IPR. That’s very important.

Arguments have been made is that medicines will be very expensive particularly for ailments such as cancer, if multinational pharmaceutical firms set high prices. The firms argue that high research costs and failure rates justify the prices they charge. What is the way out then?

Pharmaceutical companies have a cost structure that allows them to recover their research and development costs, because they are not funded through public university programs or other such vehicles. But they are willing participants in this discussion to make sure life-saving drugs are making it to patients. They too are hopeful that there can be an informed and balanced discussion to solve the problem than devolving to mere rhetoric that plays well politically but isn't getting to the heart of the issue, which is making sure all Indians have access to healthcare. This is not just about drugs either - this is about creating a system of healthcare to ensure the health and well-being of Indian citizens - and that’s about access to doctors, access to medical professionals, preventive care - and so this discussion really falls within a much broader discussion as India tackles the issue of providing for every citizen’s health.

Do you mean to say that India needs something like Obamacare, which he also mentioned in the State of Union speech?

A safety net is needed. The difference is that in the United States there is atleast some safety net. Its a tragic story when people talk about losing everything to get the care required to keep a loved one cured or alive. And now with the affordable care act, that net has widened. In India, that social safety net does not exist. I'm certain the government wants to do that. It’s just that it’s an enormous task like food security. It will be complex and at the same time, very popular.

How can the USIBC help the two governments?

The council is in a really interesting place. We have been around since 1978. So governments come and go, officials come and go, but the council is always there. We are there for companies and businesses and act as a glue in good and bad times. In the US we are very vocal about the immigration bill and policy reform overall. Things like STEM visas are very beneficial to both sides. So is expansion of work visas especially for Indian tech companies. We look to find policy advocacy that ensure both markets are open and available to folks on both sides of the ocean as it were. And we also facilitate B2B opportunities. So if there a multinational and looking to hire SMEs for some operations whether its here or the States, we are there also to make those connections. We are politically agnostic.

What chance does the immigration bill stand?

It's a new Congress, its a new day. Legislation has to begin again. It would be interesting for both sides to understand disadvantages with regard to the presidential race in 2016. I’ve heard both sides - that they will touch it, they won’t touch it. Either side doesn't know how the playbook looks like right now, but it will crystallize.